An analysis of the components inside Apple's new 16GB Verizon-compatible CDMA iPhone 4 has found a $171.35 bill of materials, suggesting Apple has reduced the cost of its handset when compared to the GSM model released in 2010.

iSuppli on Thursday announced the results of its analysis of the new CDMA variant of the iPhone 4. The teardown found "significant changes in its design and component selection," which helped to reduce the price by more than $16 from the $187.51 estimated cost of the AT&T-compatible GSM iPhone 4.

The most expensive component of the 16GB CDMA iPhone 4 — which sells for $199 subsidized with a two-year-contract — is its memory, costing an estimated $40.40 for NAND flash and SDRAM. The high-resolution Retina Display is the second most expensive component, with an estimated cost of $37.80.

The two most expensive components apparently appear unchanged from the previous version of the iPhone 4

iSuppli revealed earlier this week that the new iPhone 4 has an improved antenna design, as well as an integrated GPS chip found as part of the Qualcomm MDM6600 baseband. The baseband-GPS combo has an estimated cost of $16.41.

The CDMA iPhone 4 also features a new WLAN/Bluetooth module from Murata Manufacturing Co. Ltd., which integrates Broadcom's BCM4329 WLAN/Bluetooth/frequency modulation chip. It is the same core functional chip that has been used before, but it has shrunk in size.

"With the CDMA iPhone 4, Apple Inc. has shown once again that it never recycles a product design," said Andrew Rassweiler, senior director of teardown services for IHS. "Apple's new designs always exhibit changes, evolution and optimization. This approach is evident not only in the antenna design but also in items like the integrated GPS functionality and the shrinking of the Wi-Fi/Bluetooth combo module.

"As we dig deeper into our teardown analysis, we're certain that we will find a host of other tweaks all designed to improve quality but keep costs on a steady path of decline."

In all, iSuppli has estimated the components of the CDMA iPhone 4 to have a materials cost of $171.35. Adding in the presumed $7.10 manufacturing costs, and the total estimated bill of materials comes to $178.45.

The bill of materials estimate accounts only for hardware and manufacturing costs incurred by Apple. It does not take into consideration other expenses the company must shoulder, such as the development of software, necessary licensing agreements, or royalties that must be paid.

When you add up the profits they make vs volume and also the prices of contract-free phones, the prices from iSuppli don't seem to come close. It's probably more headline news to say Apple's product only costs a fraction of what they sell it for.

An unsubsidised iPhone 4 in the UK costs £510 incl tax, which in pre-tax dollars is $684. iSuppli are making out that it costs $178 to make so there's $508 per handset going into something else. According to their profit reports compared to volumes share, it's likely they make $100-200 profit per iPhone. That leaves $308 per handset at least spent on other things.

It's possible but it seems unlikely that the bill of materials is accurate.

When you add up the profits they make vs volume and also the prices of contract-free phones, the prices from iSuppli don't seem to come close. It's probably more headline news to say Apple's product only costs a fraction of what they sell it for.

An unsubsidised iPhone 4 in the UK costs £510 incl tax, which in pre-tax dollars is $684. iSuppli are making out that it costs $178 to make so there's $508 per handset going into something else. According to their profit reports compared to volumes share, it's likely they make $100-200 profit per iPhone. That leaves $308 per handset at least spent on other things.

It's possible but it seems unlikely that the bill of materials is accurate.

The salary of Apple's employees must be paid from somewhere. I'm sure that makes quite a huge chunk of that "$308" spent on "other things".

Why does AppleInsider keep implying that the antenna is improved over the original iPhone 4?

Quote:

Originally Posted by bjojade

This goes against what the analysts said a few weeks ago where they thought the component costs were going to be some $20-30 higher for each phone. Go figure.

This is a BOM and, and this is important, an estimate. There are plenty of other costs to consider that could easily put it $20-30 higher than the current iPhone 4 GSM cost.

Quote:

Originally Posted by Tallest Skil

Sounds like a dual-band CDMA/GSM chip is cheaper...

One chip does not a wolrd mode make. The Verizon iPhone only employs the dual-band baseband chip, not any of the other hardware needed for this connectivity. Note that it only contains radios for CDMA, and none for GSM or UMTS.

Can you say "volume discount" and "prepaid discount"? I bet Apple and Qualcomm worked out a deal that was great for both parties.

Possibly, but the bandband chip shouldnt be seen as a guarantee that there will be only one iPhone 5 model per storage capacity. There are plenty of other costs and I cant see Apple wanting to pass that onto 50 million consumers that will never have a need to use a CDMA phone.

Looking at the poor battery life of the device compared to other CDMA chips for voice the Gobi chip seems inefficient. I see that as a problem when 7 hours of talktime on CDMA is really taking place on the 2G network.